Office of the Historian

850.33/12–753

No. 184
Memorandum by the Director of the Executive Secretariat (Scott) to the Acting Secretary of State1

Washington, December 7, 1953.

Subject:

  • Position to be Taken on a Proposal for a U.S. Loan to the High Authority of the Coal and Steel Community

Discussion

Mr. Bonbright has written you a memorandum (Tab A)2 in which he points out that the President wrote a letter to the Chairman [Page 333] of the Foreign Relations and Foreign Affairs Committees3 stating that a loan to the Coal and Steel Community from the U.S. Government or one of its agencies would appear to be a secure and helpful move to foster European integration.

The High Authority of the Coal and Steel Community has informed us it would communicate a specific proposal to the U.S. and Mr. Bruce has informally obtained a draft of this proposal. A summary of the argument in the proposal is attached as Tab B.4

Recommendations:

Mr. Bonbright makes the following recommendations:

1.
In accordance with the President’s letter of June 15, 1953, the Department should support in principle the proposal for a loan of $500 million from the United States Government to the High Authority of the European Coal and Steel Community.
2.
This loan should be in the form of a line of credit opened by the Treasury in favor of the High Authority, to be drawn over a four to five-year period. It should bear a reasonable rate of interest and be amortized over a long term.
3.
The loan should be made under a special authorization to be requested from the Congress. It should be handled as a public debt transaction outside the budget, and thus not require appropriation of funds by the Congress.
4.
The Department should discuss the proposal with Treasury and FOA early next week with a view to providing staff recommendations to the Secretary, Mr. Humphrey, and Governor Stassen prior to the Secretary’s departure for Paris December 11. Agreement by the three principles then will permit the Secretary to inform Monnet when he sees him soon after his arrival in Paris.
5.
Upon receipt of the High Authority’s formal request, negotiations should be opened in Washington to work out the details.

  1. In the margin of the source text presumably the Acting Secretary initialed the space following the words “Approve this line of action.”↩
  2. Not printed; the recommendations in Bonbright’s 3-page memorandum, dated Dec. 5, are repeated verbatim in the numbered paragraphs below.↩
  3. See Document 172.↩
  4. Not attached to the source text.↩